A Simulation-Optimization Approach for Designing Resilient Hyperconnected Physical Internet Supply Chains

The Physical Internet (PI) is a recent paradigm in the supply chain management that proposes a framework in which standardization and optimization are key factors to raise supply chain efficiency, resilience, and sustainability. Strategic decisions are included in the PI, including the supply chain network design (SCND). In fact, structuring a (near) optimal design is essential to achieve the PI objectives. Additionally, disruptive events such as the COVID-19 pandemic, earthquakes, or terrorist attacks threaten the supply chains. These events are difficult to predict, but their effects can be simulated when addressing this problem. Hence, we propose a simulation-optimization approach that hybridizes a multi-objective multi-period mixed-integer program with discrete-event simulation to optimize both cost and resilience in the SCND. Furthermore, a network hyperconnection strategy is tested. Results show that both resilience and risk are improved after hyperconnecting the supply chain, especially when active edges are disturbed, but incur higher costs.